State cuts revenue estimate by 300-million dollars

Iowa’s economic picture has dimmed, and state financial experts have trimmed their estimate of state tax receipts by 300-million dollars over the next 15 months. Iowa Department of Management director Cynthia Eisenhauer says Iowa, like other states, is experiencing a precipitous drop in tax revenue — perhaps the biggest drop in 20 years. David Underwood, the chief financial officer of a manufacturing company in Mason City, is a member of the state “Revenue Estimating Council” which met this afternoon in Des Moines. He’s not sounding any alarm bells, yet. Underwood says the financial condition of the state is still very good. The new financial forecast shows the state’s budget will barely be in the black when the current fiscal year ends June 30th. Within two weeks, Governor Tom Vilsack must take almost 160 million dollars out of his budget sketch for next year. Eisenhauer will help draft those revisions. She says it is likely services will be affected and there is a possibility that layoffs will be included. Eisenhauer says the state has plenty of money to pay its bills on time.